These draft regulations disapply the provisions, introduced in Finance Act 2014, on the returns of capital by Venture Capital Trusts (VCTs) in certain circumstances where 2 or more VCTs merge on or after 6 April 2014. The power to make the regulations was introduced in Finance Act 2014, during the passage of the Finance Bill through Parliament, when it was recognised that the changes to the rules could have an unintended adverse effect on merging VCTs.
Where there has been a merger of 2 or more VCTs, the return of capital provisions will apply to the new VCT except to the extent that it issues new shares which correspond to old shares in the merging VCTs that had been issued before 6 April 2014.
The new rules are relieving and will have retrospective effect for mergers on or after 6 April 2014.
Guidance will be published to specify what records VCTs will need to keep, and what information VCTs will need to provide to HM Revenue and Customs.
Any comments should be sent to: email@example.com by 5 January 2015.